The following information is relevant for an individual firm operating in a perfectly competitive market.
Output | 30 |
Variable Cost | $2,700 |
Fixed Cost | $130 |
Marginal Cost | $80 |
Price | $80 |
What will be the firm's production decision in the short-run?
Exit
Operate
Other firms will enter into the market
Shutdown
A company will shutdown if it can not recover its avg. variable cost
Avg variable cost = variable cost / qty = 2700 / 30 = 90
As avg variable cost > price, so company should shut down in short run
The following information is relevant for an individual firm operating in a perfectly competitive market. Output...
The following information is relevant for an individual firm operating in a perfectly competitive market. Output 55 Variable Cost $4,000 Fixed Cost $200 Marginal Cost $40 Price $40 8 010256 What will be the firm's production decision in the short-run? Other firms will enter into the market Exit Operate Shutdown
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